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Learn how to make more money for less effort | MyProperty.ph
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Learn how to make more money for less effort

by CamellaPublished: March 17, 2017Updated: March 17, 2017

Buying your own home is the best investment you can make

Rental income buy to rent Camella MyProperty Philippines

At one point in your life, you may have been encouraged by your parents, a relative and friend or even by a real estate consultant to invest in a real estate property. After all, it is one of the basic necessities in life. But have you ever thought that there's more to real‐estate buying than just so you can have a primary residence in the future?

If you are looking for a source of passive income or an avenue to invest your money, then you might want to consider rental investments or particularly to "Buy‐to‐rent".

What is "Buy‐to‐rent"?

Buy‐to‐rent refers to the practice wherein a person purchases a property and rents it out to a tenant or a lessee. The owner or the lessor will be responsible for paying the mortgage and costs of maintaining the property. An ideal strategy is to bill a fairly‐priced rent which should just be sufficient to cover expenses until mortgage has been fully paid, at which time the majority of the rent becomes profit. Alternatively, he/she can charge more in order to achieve a higher rental yield.

Is today the best time to invest in "Buy‐to‐rent?

Recurring Income. According to Lamudi's latest report about real estate in the Philippines, a resurfacing trend in the real estate industry is income generating assets. While purchasing a high end space is a huge leap for someone who is just starting to invest the real‐estate property, there are budget to mid‐priced units or spaces that Filipinos can invest into.

For instance, you, as a fledgling investor, can start just right by renting out a newly‐purchased house and lot. Each month's rent money from the tenant or lessee shall be just enough to cover the mortgage and other maintenance expenses. The remainder from the money is your profit; and with this you have already started a steady cash flow or a recurring income.


High Demand Rate. Philippines, in a large scale, is a "rental society". Not all have the purchasing power to actually buy their own house. Many still choose to rent than buy, and so the demand for rental properties from budget to affordable house and lot continues to build a strong demand. In fact, according to Lamudi's most recent report, 60% (from a sample size) of Filipinos still prefers or dwells in a rental property.


Is there an affordable property that you could "Buy‐to‐rent"?

Any property can be purchased and then later on leased out to potential tenants. However, if you are looking for affordable options, you can always check out the websites of real estate companies, real estate consultants or brokers and websites or mobile apps like Lamudi for the list of available affordable properties. Take note of the budget that you have and the terms of payment that are acceptable to you as consideration for the purchase that you will make. One you are done buying the property of your choice, you can start planning on how you will lease it to the right tenant to earn additional income while paying for the mortgage, etc.

What Do I Get From Renting Out My Property?

By renting out your property, you are generating a passive income while the value of the property also increases over time.  The passive income that you earn through the rent being paid by your tenant can be added up to the payment of the mortgage and other payables related to the purchase of that property, or you can either save the money for your future needs or use it for your next property purchase. The "buy-to-rent" option is now very attractive, as financial awareness is starting to spread and people continuously want to seek ways to increase their income without necessarily actively seeking it.

What are you waiting for? Now that you are already knowledgeable about real estate in the Philippines, income generating assets as a promising trend in 2017, and the even more growing demand for rental properties, it is with no doubt that now is the perfect time to enter and join the niche.

 

This article was contributed by Camella. Main photo via Shutterstock

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